This video shares a little about my take on the Cash Flow Quadrant and a brief description of each quadrant.
I don't know if you have heard of the book, The Cashflow Quadrant by Robert Kiyosaki, but if you have not, I recommend reading that book, especially if you want to start generating income passively.
The book speaks about the E, S, B and I in 4 quadrants. The first quadrant the E, which is the employee. You have a job, you have active income. You're basically trading time for money. So if you do not go to work, you don't get paid, and if you don't go to work and you still get paid, that means that you have to put in some type of vacation and you're taking some type of Pto or sick time to get paid. So basically you are still trading your time for money. You do not have any leverage. There's not a whole lot of freedom in this quadrant.
Next in the bottom left quadrant is S and you are self-employed. So basically you own a job. Now your time might equal a little more money, but you still have no leverage. And I know a lot of people that are self-employed and my husband, he's self-employed and he actually enjoys what he does. Now, a lot of people you know, become self-employed because they don't want to be told how to do their work. They don't want to be told what to do. They want to be their own boss and that's practically fine. And that works. You know, something that you're very passionate about and you want to open up a business.
Now don't get the S mixed up with being a Business Owner because there is a difference. Being a self-employed you still own the job, but the thing is is that if you take off, your operation does not run without you. Your job or your business does not run without you. So you're your own boss, but you do not have a team. You do not have anybody else working for you. It's just you, so if you decide to take off or if you go on vacation or even if you get sick, your income will stop. You will not receive income from this business, so it's just like owning a job.
The top right quadrant is the B. Now, this is a business owner. The business owner actually owns a system. This means that they have people and systems working for them. Now I like this. I love this model. I'm working on setting the B quadrant all the way up so that I will have a system completely in place that is working for me. You can leverage a system that can be either automated machine systems or people or both because you know you can have an online business that you have set up correctly that will help you generate income passively.
Passive income is not dependent on your presence. So if you have systems in place that help you generate income in your absence, you are a business owner, you are leveraging systems to help make you money. So that means that you can take vacations, you can even get sick and you're still able to generate income because the system does not require for you to be present to make money.
The last quadrant in the bottom right is the I, the investor. And this is where money works for you. Money works for money and it's another form of passive income. You start investing your money in different places in your commodities and stocks and in different places. You have your money making money for you. Do you have to be present for the money to make money? No Man. You know, the great thing about money is money doesn't get sick. Money doesn't call in sick, doesn't get tired or have an attitude. Money just keeps on working even when you aren't working. So being on the right side of this cashflow quadrant is something that I'm deeply passionate about. My goal is to be in the B and the I quadrants of this cash flow quadrant, but right now I am focused on building in the B quadrant and I help people set up their business so that they can be in the B quadrant and leverage systems to generate passive income. Check out this post for ideas on how to generate passive income.
If you desire to start leveraging systems so that you can have more freedom to do even more things that you are passionate about, grab the free keys to building an online business.
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